Why The President’s Blacklisting Executive Order Won’t Work

As a part of the Acquisition Reform Working Group (ARWG), ABC along with employer groups and associations representing federal contractors sent a letter April 20 to the U.S. House and Senate Armed Services Committees outlining major concerns with President Obama’s Fair Pay and Safe Workplaces Executive Order (E.O. 13673).

The E.O., which was signed July 31, 2014, could result in some of the best firms being arbitrarily blacklisted from winning future federal contracts for committing even minor violations of a rapidly growing and constantly changing labyrinth of workplace laws and regulations, including 14 federal statutes and yet-to-be-defined equivalent state laws. By seeking to impose new penalties on contractors beyond those specified by Congress, the president is exceeding his office’s constitutional authority and undermining the carefully balanced contracting provisions that already exist.

The federal contracting community believes the full effect of the “blacklisting E.O.” won’t be known until forthcoming proposed regulations by the Federal Acquisition Regulation (FAR) Council and the U.S. Department of Labor (DOL)implementing the order can be reviewed.

However, many have expressed concern that this executive order could be used to reward political allies with contracts while blacklisting political foes. Such high stakes open the door to corruption and favoritism in the procurement process, allow trial lawyers to extort larger settlements from firms, enable bureaucratic agencies to extract costly settlements for conduct that may have been legal, and give labor unions leverage to get businesses to capitulate to their demands.

The ARWG letter explains in detail why the E.O. is troubling the federal contracting community and asks the committees to conduct a thorough review of the E.O. in order to:

Determine if the approach is efficient;

Measure the impact it would have on the Department of Defense (DOD) procurement process;

Articulate the associated risks and costs it would create for the government and contractors, and

Evaluate if it is a necessary complement to existing labor laws.

To learn how to participate in the forthcoming rulemaking process and comply with new rules once Executive Order 13673 is in effect, email ABC Director of Federal Procurement and Labor Affairs Ben Brubeck at Brubeck@abc.org.